Phoenix

This just in from The Phoenix News Times:

Banks Suing Governor over Reversal of Controversial “Anti-Deficiency” Law

Remember when we wrote about a bill that could financially devastate homeowners facing foreclosure? Remember when they reversed the bill?

Well, it might just be back.

Last Monday, the American Bankers Association — which represents more than 70 banks in the state — filed a lawsuit with the Arizona Supreme Court against Governor Jan Brewer, challenging the constitutionality of how the Legislature reversed controversial Senate Bill 1271.

Specifically, bankers are requesting that the court reverse Section 17 of House Bill 2008 –the exact same section that reversed Senate Bill 1271.

The essence of banking lobby’s case hangs on how 1271 was reversed. Brewer signed a bill reversing SB1271 in a special session. Because the bill reversing 1271 was unrelated to the four topics Brewer listed when calling the special session, the Arizona Banker’s Association says the reversal was unconstitutional, according to its petition.

It also argues that the entire house bill — one of nine sections of the long-awaited budget — may very well be unconstitutional. According to the Arizona Constitution, bills should stick to one topic. But, the petition argues, HB 2008 addresses many different issues (including 1271) that are not remotely similar.

Real estate lawyer Jim Eckley — a vocal critic of 1271 — calls the lawsuit absurd.

This could cause a lot of problems for the already troubled Phoenix real estate market.

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